The Week in Housing: more funding axed as starts in London fall off cliff

Good afternoon.

The government confirmed this week that it had cancelled ￡538.8m of funding for infrastructure projects that were intended to unlock more than 42,000 homes because “they proved not to be deliverable within the parameters” of the programme or were withdrawn by the local authority.

Concern with how funding pots are designed and the timeframes attached to them is an issue that has been raised with Inside Housing several times before.

In this instance, funding was withdrawn from a total of 16 projects that had been assigned cash via the Housing Infrastructure Fund (HIF) following viability concerns.

The ￡4.2bn HIF was set up in 2017 to offer local authorities grant funding for key infrastructure, such as transport and utilities connections, that would support new housing developments. To date, just ￡1.3bn (31%) of the fund has been spent.

When funding isn’t being axed from schemes it is often just being handed back due to issues such as inflation, council budget constraints and complications around homes bought through the Right to Buy.

Using Freedom of Information legislation, Inside Housing?revealed that councils gave back ￡6.4m to the government which had been earmarked to decarbonise social housing last year.

Nine local authorities returned grant from the Social Housing Decarbonisation Fund in the last financial year that was intended to be spent on ‘fabric-first’ energy efficiency improvements in their worst-performing social homes.

The news that more than ￡0.5bn was axed from the HIF came as the G15 called on the government to launch an Affordable Housing Commission as new figures reveal development in the capital is “grinding to a halt”.

Among London’s biggest social landlords, starts of affordable homes in the current financial year are expected to have fallen by 76%, to 1,769, in the capital , compared with 7,363 the previous year.

The latest figures emerged in a letter to housing secretary Michael Gove from thinktank Centre for London and Fiona Fletcher-Smith, chair of the G15 and chief executive of L&Q.

The letter was a response to Mr Gove’s latest plans to tackle the housing crisis, which include increasing development on brownfield sites.

But in an attack on the government’s approach, the letter said: “Despite the crisis facing Londoners, the government has failed to step up and invest in the delivery of social housing.

“Insufficient sustainable funding, among many structural issues, is a critical reason why housing is in crisis in our capital city.”

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